How much does your company bill an hour?

ClarkeKent

Surprised to get a quote from a web development firm for £40 an hour. Got a £50 quote from a London firm.

I was amazed, having worked in low paid jobs all my life and living in the North perhaps I am blinkered.

How much does your company bill per hour?

Gleeful

Well out of that £40 they will have lots of overheads. The whole £40 won't be going direct to the person who is completing the work.

Web development is well paid though, so hence the high rate.

I don't bill anyone in my business but I do pay freelance models between £10 and £30 an hour.

paddyrg

Thing to remember is that it's not a straight comparison-anyone on say £7.20 also gets holiday pay (12.08%), may have pension provision or benefits, and the employer also has to pay NI (another 13-ish percent), plus pay payroll costs (£20/person/run), plus provision for sick days, maternity pay, etc., which are not insignificant. The employer also has to pay for the overheads of running a business - equipment, accounting, office rental, etc.

The overhead of having staff can be as high as 125% in terms of providing desk space, heating, air con, etc. All that before profit.

So, that £40/hr is not as high as it sounds, certainly better than minimum wage but not comparing like with like - especially when you factor in flexibility of booking a few hours as opposed to being on a permanent contract.

PasturesNew

My company used to charge £750/day for me, so £100/hour. That was in ~1999.
I was paid £25k/year.

I'd not charge less than £25/hour for anything I do if I set myself up doing something. The reason for this is that the "local typing agencies" probably charge clients £20/hour or so for bog standard agency temps and receptionists .... and they still seem to find clients.

Pennywise

You also have to remember that people running their own business can spend as little as 50% of their day actually earning money. The rest of their time is admin, quotes, marketing, supervision of staff, etc.

As said above, there are also the overheads (eg the firm themselves will be paying £100 or more per hour for their accountancy and legal support), office costs, equipment, etc.

And then, again as said above, no paid sick pay, holidays, pensions, etc for people running their own business.

A charge out rate of £50 per hour for a sole trader could easily be just £10-£20 equivalent "wage" after factoring in overheads, non chargeable time and "benefits" etc. To be honest, I'd be very surprised if you found anyone who'd charge less than that.

motorguy

I typically bill at £40-60 an hour, minimum 3 month contract, 40 hours a week, depending on the role and the company.

I'm a self employed IT Contractor.

Last role was for 8 months at £50 an hour.

If i was working for a company they'd probably be charging me out at around £800 a day.

All things considered i'm probably at the lower end of the scale - i know of people in IT contracts at £1200 a day, however i dont go for stressful or high pressure roles, nor does the skillset i have command that sort of rate

motorguy

Pennywise wrote: »

You also have to remember that people running their own business can spend as little as 50% of their day actually earning money. The rest of their time is admin, quotes, marketing, supervision of staff, etc.

As said above, there are also the overheads (eg the firm themselves will be paying £100 or more per hour for their accountancy and legal support), office costs, equipment, etc.

And then, again as said above, no paid sick pay, holidays, pensions, etc for people running their own business.

A charge out rate of £50 per hour for a sole trader could easily be just £10-£20 equivalent "wage" after factoring in overheads, non chargeable time and "benefits" etc. To be honest, I'd be very surprised if you found anyone who'd charge less than that.

If its a web development company, they will aim to be billing staff out 40 hours per week. Certainly the IT companies i worked for always did. Putting down non billing hours on a timesheet was by exception.

As for self employed, i dont commit to less than 3 months @ 40 hours a week. The two latest contracts i'm looking at are 1 year with possible extensions, and 2 year years with possible extensions.

As for overheads, i either work from home (last contract) or on client site (the two contracts before that), so my overheads really only relate to travel.

If i stay over during the week i usually find a cheap B&B nearby and book flights in as far in advance as possible.

ClarkeKent

I suppose you acclimatize to your environment, I have always been in a minimum wage/penny pinching small business setup so you think that is the norm across the UK. Then when you expand your wings a little, you find that it is by far the case!

novelty-socks

I agree it's all relative but when I was freelance I aimed to charge £500/day and most often landed in the £300-£350 range. The work I did for clients would typically deliver value far in excess of that, and I would certainly have charged more if possible.

Two other thoughts:

1. In my opinion, if you're working with a contractor or freelancer, you need to think about their rate as an investment, and work out the return you'll get on it. For instance, my old website cost about £5,000, but I could certainly attribute £50,000+ of revenue to leads that it generated. Definitely a worthwhile investment.

2. Good web developers are hard to find. If you've found one who's good at £40/hour, you've done well. Get them to sign that contract!

Pennywise

My local back-street garage charges £50 per hour to service/repair my car. What's the difference? Main car dealerships charge £75-£125 per hour.

I paid £300 for a valuation of a small office - the surveyor spent less than an hour looking around and measuring it. Can't have taken more than an hour to dictate his valuation, so that's £150 per hour.

motorguy

Pennywise wrote: »

I paid £300 for a valuation of a small office - the surveyor spent less than an hour looking around and measuring it. Can't have taken more than an hour to dictate his valuation, so that's £150 per hour.

+ time to get to you (assuming he didnt teleport), time to get back to the office / get to next job, dictate to someone else he had to pay / write up the report, get it out to you, answer any prospective queries, etc.

Probably closer to 1/2 a days work.